Sales Rep OTE Ranges for Low Cost Cities

Someone asked how to consider potential locations for a new sales focused-office in a lower cost city. Their HQ is in the San Francisco Bay area.

For field sales, I evaluate for:

  1. Target market density and
  2. Proximity to an airport

That’s it. The rest you can adjust around.

Here’s the thing: if you underestimate OTE it generally means local sales professionals are booking enough business to support those OTE rates and then the only guaranteed money going out is base anyway.  If you overestimate OTE then, again, comp is relative to quota so (1) it stands to reason local salespeople are booking less than you thought, or (2) it may be a temporarily inflated market and/or (3) it’ll show up in attainment.

For inside sales, I evaluate for:

  1. Proximity to universities with great business (admin/mgmt, marketing, finance, etc.) and extracurricular programs (athletics, debate, etc.)
  2. Availability of housing and its cost relative to income, the population in the “young professional” age range*, and availability of social activities/nightlife. 

*Inside Sales isn’t exclusively for younger professionals, but it certainly leans that way, thus the above.

On the other hand, if it’s a question of improving the bottom-line and/or cash flow, the better solution tends to be to move everyone else out of the tier 1 city.  😉

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